Ashburn, Va. – MCI Inc., which recently agreed to be acquired by Verizon Communications Inc. and rejected a higher offer from Qwest Communications, reported much smaller first-quarter losses Thursday due to lower operating costs.
The long-distance phone company also backed its earlier revenue guidance for 2005, projecting an annual decrease of 10 percent to 14 percent.
Its shares rose 21 cents to close at $25.50 in Thursday trading on the Nasdaq Stock Market, below the price of at least $26 Verizon has agreed to pay.
The company reported it lost $2 million, or 1 cent per share, for the three months ended March 31 versus a loss of $388 million, or $1.19 per share, in the year-earlier quarter. Losses from continuing operations totaled $91 million, or 28 cents per share, compared with $386 million, or $1.18 per share, in the 2004 period.
Revenue fell 12 percent to $4.79 billion from $5.42 billion last year.
The company said operating expenses fell sharply compared with the year-earlier quarter, when MCI incurred significant costs related to its reorganization. In the first quarter of 2005, access costs; costs of services and products; and selling, general and administrative expenses totaled $4.3 billion, down 17 percent compared with $5.2 billion last year.
MCI said it continues to expect 2005 revenue of $18 billion to $19 billion, in line with analysts’ consensus estimate of $18.26 billion.
MCI revenues have dropped from $24.3 billion in 2003 to $20.7 billion in 2004, due to intense competition in the telecommunications industry.
Revenue dropped just 3 percent from the year-ago quarter in this segment, to $1.16 billion.
